About Private Loans
Private education loans are non-federal loans offered by some lenders and state governments. Private loans are designed to supplement a student's financial aid package and help fill in any gaps between the financial assistance that is offered by USD and other sources and the amount the student actually needs to cover the total cost of his or her education.
Private loans are not federally endorsed or guaranteed, but they must be certified, or approved, through the USD Financial Aid Office. A private loan cannot exceed your cost of attendance (budget) minus all other financial aid.
COA (Cost of attendance): an estimate of tuition and fees (based of full-time enrollment), room and board, transportation and other costs for the period of enrollment covered by the loan. Other costs could include expenses such as books, travel and personal expenses needed during the academic year. (View USD's Private Education Loan Self-Certification Cost of Attendance)
Estimated financial assistance: All federal, state, institutional (school), private and other sources of aid. Your estimated financial assistance may be obtained from your award letter.
Students applying for these types of loans should be aware that they may qualify for federal student loans, which may have terms and conditions that are more favorable than those offered by private lenders. We recommend that you complete a FAFSA and apply for federal financial aid before applying for a private loan, as federal loans are generally more advantageous for student borrowers. After students exhaust all scholarships, and federal loan eligibility, the Federal Plus or private loan may be borrowed up to the cost of attendance less any other financial aid.
Private loans are based on creditworthiness, so the initial step in applying is a credit check with the lender. Since the loans are not federally endorsed, each lender's loan program is different: Each loan varies on interest rates, fees charged, the amount you may borrow (minimum and maximum) and repayment terms.
Selecting a Lender
Selecting a lender for a private alternative loan is an important decision, one that will affect you for the life of your loan. Students (and families) are encouraged to research the lender benefits, customer service and other information related to loan processing, services and cost. USD’s lender list is available at FastChoice. This list was chosen based historical borrowing practices of USD students, along with selections of new lenders based on particular options that may be advantageous to students. You have the right to select any lender you wish for a private alternative loan and you are not required to choose from this list.
USD does not endorse or recommend any specific lender(s) and you are free to borrow your student loan from any participating lender. Private loans are obtained for the full academic year and will have two equal disbursements in the fall and spring semesters.
On February 14, 2010, the Private Student Loan Transparency and Improvement Act went into effect which requires that lenders obtain disclosure information and self-certification from borrowers prior to disbursement of loan funds. As a result, you should plan on 2 to 4 weeks of processing time for a private alternative loan.